Newsletter 91 - November 6, 2021
Welcome to the 91st edition of Trade War.
Biden calls out Xi Jinping for not joining the global climate summit. Xi prepares to further cement his status in China with a resolution on history, only the third in the PRC’s history. And the state press moves to create a full-on cult of personality for China’s leader.
The 38-year-old founder of TikTok parent Bytedance steps down. Creditors prepare to pick over the billionaire toys of Evergrande’s Xu Jiayin. And China is struggling to find enough skilled factory workers as Chinese youth spurn blue collar jobs.
Xi not showing up? C’mon
U.S. President Joe Biden has criticized China’s president Xi Jinping, as well as Russia’s Putin, for not coming to the meeting on global climate change, reports U.S. News and World Report.
"I think – presumptuous of me to talk for another leader – but the fact that China is trying to assert, understandably, a new role in the world as a world leader, not showing up? C'mon," Biden said at a press conference in Glasgow, Scotland.
"The single most important thing that's gotten the attention of the world is climate. … It just is a gigantic issue. They've walked away. How do you do that and claim to be able to have any leadership now? Same with Russia," the U.S. president said.
Xi rewrites history to cement role in pantheon
Meanwhile, Xi is busy at home as he lays the ideological groundwork to stay in power for years to come, reports the Economist’s Gady Epstein.
“In preparation for a third five-year term as the Communist Party’s leader, Xi Jinping has been changing the rules of politics, business and society. He has also been pursuing another project that he sees as essential to his continued grip on power: rewriting the history of the party itself,” reports the Economist.
“Xi wants to show his country that he is indispensable, a political giant on a par with Mao Zedong and Deng Xiaoping who is turning China into a global power by building on their legacy.”
Key to that goal is an imminent four-day party meeting or plenum which will open on November 8 in Beijing, and bring together the Central Committee, some 370 top party members from politics and the military. The most important item on the agenda: a resolution on the party’s history, only the third in China’s modern history.
“The first, in 1945, and the second, in 1981, were triumphs for Mao and Deng respectively, consolidating their grip on power at crucial junctures,” reports the Economist. “Mr Xi’s ability to secure one of his own suggests that he has quelled any meaningful opposition to extending his rule,” beyond next fall’s 20th Party Congress.
While not yet publicly released, the resolution is expected to “celebrate the party’s achievements, minimize the horrors unleashed by Mao and suggest that Mao, Deng and Mr Xi have shared the same vision. The reigns of Mao and Deng will be presented as essential preliminary phases before the start of Mr Xi’s “new era”,” writes Epstein.
“Mao helped the Chinese people “stand up” after a century of humiliation by foreign powers. Deng set China on a path to “get rich” after centuries of poverty. Now Mr Xi is helping China to “get strong.””
Xi has repeatedly said that the neither the Mao nor the Deng era should “negate” the other. “He does not want a history filled with mistakes and contradictions, nor one that raises questions about one-man rule. He believes the collapse of the Soviet Union was hastened by a failure to protect the legacies of Lenin and Stalin. He has campaigned vigorously against “historical nihilism”—essentially anything that casts the party’s past in an unfavorable light,” Epstein explains.
Xi: “a man of determination and action”
China’s state media is increasingly devoting its top coverage to building up a Mao era-style cult of personality for Xi Jinping, to justify his plan to become leader for life.
Since becoming China’s top leader in 2012, “Xi has been seen as a man of determination and action, a man of profound thoughts and feelings, a man who inherited a legacy but dares to innovate, and a man who has forward-looking vision and is committed to working tirelessly,” writes the official Xinhua News.
“On the new journey, Xi is undoubtedly the core figure in charting the course of history. How will he lead the Party in the face of opportunities and challenges? How will he bring China back to the world's center stage? Today, the world is watching Xi.”
China Xinhua News @XHNewsThis is a man of determination and action, a man of profound thoughts and feelings, a man who inherited a legacy but dares to innovate, a man who has forward-looking vision and is committed to working tirelessly https://t.co/cr8e45TvE8 https://t.co/f5hG1r5Tdi
38-year-old ByteDance founder steps down
TikTok parent Bytedance’s founder is the latest high profile tech company chief to resign, reports the Wall Street Journal’s Liza Lin.
38-year-old Zhang Yiming’s departure, coming amidst Beijing’s crackdown on big private companies, follows earlier resignations at online retailer Pinduoduo, short-video platform Kuaishou, and e-commerce company JD.com.
“In China, ByteDance, like other large technology companies, is facing myriad regulatory pressures, from long working hours to the addictive nature of their app for teenagers,” writes Lin.
Zhang’s wealth tripled to 340 billion yuan last year, according to Beijing-based Hurun Research Institute. Zhang is now richer than Tencent’s founder Pony Ma and Alibaba’s Jack Ma. ByteDance investors include Sequoia China and the Carlyle Group.
Superyacht, Gulfstream or Hong Kong mansion?
Evergrande’s billionaire founder Hui Ka Yan (also known as Xu Jiayin) may have to sell off his luxury assets including a $45 million super yacht, Gulfstream jets, and Hong Kong mansions to pay creditors, reports Bloomberg News’ Venus Feng.
“With Chinese authorities urging Hui to to use his own money to alleviate Evergrande’s market-roiling crisis, the property tycoon’s personal balance sheet has become a key variable for bond investors trying to game out how long the developer can stave off default,” writes Feng.
Valued at an estimated $485 million, “Hui’s luxury assets alone could help cover the more than $400 million in bond coupons that are yet to come due or have grace periods ending this year,” reports Bloomberg.
“He needs to show that he is using at least some personal assets to pay off some debts,” Zhiwu Chen, director of the Asia Global Institute at the University of Hong Kong told the financial news service. “He needs to show a lot of good will in order to avoid more serious consequences.”
Chinese youth spurn factory jobs
China is struggling to come up with enough skilled manufacturing workers to meet its economic modernization goals, with such work traditionally looked down upon amongst Chinese, reports the South China Morning Post’s Jane Cai.
“Around 64 per cent of some 26,600 vocational college students in a recent nationwide survey by China Youth Daily said they would not work in factories or construction sites: either because factory life was too dull, offered poor career development prospects and salaries, or because the work environment was unattractive and socializing options were limited,” reports the Post.
“China is short of at least 30 million skilled workers in the manufacturing sector, and the gap is expected to widen to 40 million by 2025,” writes Cai.
‘Common Prosperity’ is failing to live up to its equity aspirations, write University of Michigan’s Mary Gallagher, Cornell’s Eli Friedman, and University of Queensland’s Shahar Hameiri in three brief analyses in Neican.
This tweet thread by Stanford political science graduate student Yiqin Fu features fascinating maps showing population and other demographic shifts, over the last decade in China.
Here is a cool timeline with links on China’s year of corporate crackdowns, from Bloomberg News’ Zheping Huang.
From Warsaw with Love - new book shout-out
Not a China book but from longtime China journalist and author John Pomfret: very much looking forward to reading his just-released From Warsaw with Love: Polish Spies, the CIA, and the Forging of an Unlikely Alliance.
“Former Washington Post reporter John Pomfret went the shoe-leather route — interviewing dozens of current and former government officials and intelligence operatives on both sides of the Atlantic and mining declassified files in Poland — to put together his fascinating story of the Polish-U.S. intelligence relationship,” writes Viveca Novak for NPR.
From a recent hike, some mountain fading fall foliage.